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29 U.S.C. § 1381 — Withdrawal liability established; criteria and definitions

Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1381 — Withdrawal liability established; criteria and definitions

**(a)** If an employer withdraws from a multiemployer plan in a complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amount determined under this part to be the withdrawal liability. **(b)** For purposes of subsection (a)— (1) The withdrawal liability of an employer to a plan is the amount determined under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&edition=prelim) to be the allocable amount of unfunded vested benefits, adjusted— (A) first, by any de minimis reduction applicable under [section 1389 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1389&num=0&edition=prelim), (B) next, in the case of a partial withdrawal, in accordance with [section 1386 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1386&num=0&edition=prelim), (C) then, to the extent necessary to reflect the limitation on annual payments under [section 1399(c)(1)(B) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1399/c/1/B&num=0&edition=prelim), and (D) finally, in accordance with [section 1405 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1405&num=0&edition=prelim). (2) The term “complete withdrawal” means a complete withdrawal described in [section 1383 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1383&num=0&edition=prelim). (3) The term “partial withdrawal” means a partial withdrawal described in [section 1385 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1385&num=0&edition=prelim).

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Source file: Laws/federal/codes/united-states-code/title-29/section-1381-withdrawal-liability-established-criteria-and-definitions--e6a02e8a3c.md
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Source location: Title 29, Chapter 18, § 1381; chapter-018-employee-retirement-income-security-program.md

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Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1383 — Complete withdrawal

**(a) Determinative factors** For purposes of this part, a complete withdrawal from a multiemployer plan occurs when an employer— (1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan. **(b) Building and construction industry** (1) Notwithstanding subsection (a), in the case of an employer that has an obligation to contribute under a plan for work performed in the building and construction industry, a complete withdrawal occurs only as described in paragraph (2), if— (A) substantially all the employees with respect to whom the employer has an obligation to contribute under the plan perform work in the building and construction industry, and (B) the plan— (i) primarily covers employees in the building and construction industry, or (ii) is amended to provide that this subsection applies to employers described in this paragraph. (2) A withdrawal occurs under this paragraph if— (A) an employer ceases to have an obligation to contribute under the plan, and (B) the employer— (i) continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required, or (ii) resumes such work within 5 years after the date on which the obligation to contribute under the plan ceases, and does not renew the obligation at the time of the resumption. (3) In the case of a plan terminated by mass withdrawal (within the meaning of [section 1341a(a)(2) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1341a/a/2&num=0&edition=prelim)), paragraph (2) shall be applied by substituting “3 years” for “5 years” in subparagraph (B)(ii). **(c) Entertainment industry** (1) No

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1383

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Federal law — U.S. Code and appendices · legal_authorities

29 U.S.C. § 1389 — De minimis rule

**(a) Reduction of unfunded vested benefits allocable to employer withdrawn from plan** Except in the case of a plan amended under subsection (b), the amount of the unfunded vested benefits allocable under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&edition=prelim) to an employer who withdraws from a plan shall be reduced by the smaller of— (1) ¾ of 1 percent of the plan’s unfunded vested obligations (determined as of the end of the plan year ending before the date of withdrawal), or (2) $50,000, reduced by the amount, if any, by which the unfunded vested benefits allowable to the employer, determined without regard to this subsection, exceeds $100,000. **(b) Amendment of plan for reduction of amount of unfunded vested benefits allocable to employer withdrawn from plan** A plan may be amended to provide for the reduction of the amount determined under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&edition=prelim) by not more than the greater of— (1) the amount determined under subsection (a), or (2) the lesser of— (A) the amount determined under subsection (a)(1), or (B) $100,000, reduced by the amount, if any, by which the amount determined under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&edition=prelim) for the employer, determined without regard to this subsection, exceeds $150,000. **(c) Nonapplicability** This section does not apply— (1) to an employer who withdraws in a plan year in which substantially all employers withdraw from the plan, or (2) in any case in which substantially all employers withdraw from the plan during a period of one

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1389

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29 U.S.C. § 1405 — Limitation on withdrawal liability

**(a) Unfunded vested benefits allocable to employer in bona fide sale of assets of employer in arms-length transaction to unrelated party; maximum amount; determinative factors** (1) In the case of bona fide sale of all or substantially all of the employer’s assets in an arm’s-length transaction to an unrelated party (within the meaning of [section 1384(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1384/d&num=0&edition=prelim)), the unfunded vested benefits allocable to an employer (after the application of all sections of this part having a lower number designation than this section), other than an employer undergoing reorganization under title 11 or similar provisions of State law, shall not exceed the greater of— (A) a portion (determined under paragraph (2)) of the liquidation or dissolution value of the employer (determined after the sale or exchange of such assets), or (B) in the case of a plan using the attributable method of allocating withdrawal liability, the unfunded vested benefits attributable to employees of the employer. (2) For purposes of paragraph (1), the portion shall be determined in accordance with the following table: If the liquidation or distribution value of the employer after the sale or exchange is—The portion is— Not more than $5,000,00030 percent of the amount. More than $5,000,000, but not more than $10,000,000$1,500,000, plus 35 percent of the amount in excess of $5,000,000. More than $10,000,000, but not more than $15,000,000$3,250,000, plus 40 percent of the amount in excess of $10,000,000. More than $15,000,000, but not more than $17,500,000$5,250,000, plus 45 percent of the amount in excess of $15,000,000. More than $17,500,000, but not more than $20,000,000$6,375,000, plus 50 p

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1405

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29 U.S.C. § 1461 — Effective date; special rules

**(a)** The provisions of this subchapter take effect on September 2, 1974. **(b)** Notwithstanding the provisions of subsection (a), the corporation shall pay benefits guaranteed under this subchapter with respect to any plan— (1) which is not a multiemployer plan, (2) which terminates after June 30, 1974, and before September 2, 1974, (3) to which [section 1321 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1321&num=0&edition=prelim) would apply if that section were effective beginning on July 1, 1974, and (4) with respect to which a notice is filed with the Secretary of Labor and received by him not later than 10 days after September 2, 1974, except that, for reasonable cause shown, such notice may be filed with the Secretary of Labor and received by him not later than October 31, 1974, stating that the plan is a plan described in paragraphs (1), (2), and (3). The corporation shall not pay benefits guaranteed under this subchapter with respect to a plan described in the preceding sentence unless the corporation finds substantial evidence that the plan was terminated for a reasonable business purpose and not for the purpose of obtaining the payment of benefits by the corporation under this subchapter or for the purpose of avoiding the liability which might be imposed under subtitle D if the plan terminated on or after September 2, 1974. The provisions of subtitle D do not apply in the case of such a plan which terminates before September 2, 1974. For purposes of determining whether a plan is a plan described in paragraph (2), the provisions of [section 1348 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1348&num=0&edition=prelim) shall not apply, but the corporation shall make

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1461

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29 U.S.C. § 1391 — Methods for computing withdrawal liability

**(a) Determination of amount of unfunded vested benefits allocable to employer withdrawn from plan** The amount of the unfunded vested benefits allocable to an employer that withdraws from a plan shall be determined in accordance with subsection (b), (c), or (d) of this section. **(b) Factors determining computation of amount of unfunded vested benefits allocable to employer withdrawn from plan** (1) Except as provided in subsections (c) and (d), the amount of unfunded vested benefits allocable to an employer that withdraws is the sum of— (A) the employer’s proportional share of the unamortized amount of the change in the plan’s unfunded vested benefits for plan years ending after September 25, 1980, as determined under paragraph (2), (B) the employer’s proportional share, if any, of the unamortized amount of the plan’s unfunded vested benefits at the end of the plan year ending before September 26, 1980, as determined under paragraph (3); and (C) the employer’s proportional share of the unamortized amounts of the reallocated unfunded vested benefits (if any) as determined under paragraph (4). If the sum of the amounts determined with respect to an employer under paragraphs (2), (3), and (4) is negative, the unfunded vested benefits allocable to the employer shall be zero. (2) (A) An employer’s proportional share of the unamortized amount of the change in the plan’s unfunded vested benefits for plan years ending after September 25, 1980, is the sum of the employer’s proportional shares of the unamortized amount of the change in unfunded vested benefits for each plan year in which the employer has an obligation to contribute under the plan ending— (i) after such date, and (ii) before the plan year in which the withdrawal of the employer occurs

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1391

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29 U.S.C. § 1385 — Partial withdrawals

**(a) Determinative factors** Except as otherwise provided in this section, there is a partial withdrawal by an employer from a plan on the last day of a plan year if for such plan year— (1) there is a 70-percent contribution decline, or (2) there is a partial cessation of the employer’s contribution obligation. **(b) Criteria applicable** For purposes of subsection (a)— (1) (A) There is a 70-percent contribution decline for any plan year if during each plan year in the 3-year testing period the employer’s contribution base units do not exceed 30 percent of the employer’s contribution base units for the high base year. (B) For purposes of subparagraph (A)— (i) The term “3-year testing period” means the period consisting of the plan year and the immediately preceding 2 plan years. (ii) The number of contribution base units for the high base year is the average number of such units for the 2 plan years for which the employer’s contribution base units were the highest within the 5 plan years immediately preceding the beginning of the 3-year testing period. (2) (A) There is a partial cessation of the employer’s contribution obligation for the plan year if, during such year— (i) the employer permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute under the plan but continues to perform work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required or transfers such work to another location or to an entity or entities owned or controlled by the employer, or (ii) an employer permanently ceases to have an obligation to contribute under the plan with respect t

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1385

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29 U.S.C. § 1386 — Adjustment for partial withdrawal; determination of amount; reduction for partial withdrawal liability; procedures applicable

**(a)** The amount of an employer’s liability for a partial withdrawal, before the application of sections 1399(c)(1) and 1405 of this title, is equal to the product of— (1) the amount determined under [section 1391 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1391&num=0&edition=prelim), and adjusted under [section 1389 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1389&num=0&edition=prelim) if appropriate, determined as if the employer had withdrawn from the plan in a complete withdrawal— (A) on the date of the partial withdrawal, or (B) in the case of a partial withdrawal described in [section 1385(a)(1) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1385/a/1&num=0&edition=prelim) (relating to 70-percent contribution decline), on the last day of the first plan year in the 3-year testing period, multiplied by (2) a fraction which is 1 minus a fraction— (A) the numerator of which is the employer’s contribution base units for the plan year following the plan year in which the partial withdrawal occurs, and (B) the denominator of which is the average of the employer’s contribution base units for— (i) except as provided in clause (ii), the 5 plan years immediately preceding the plan year in which the partial withdrawal occurs, or (ii) in the case of a partial withdrawal described in [section 1385(a)(1) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1385/a/1&num=0&edition=prelim) (relating to 70-percent contribution decline), the 5 plan years immediately preceding the beginning of the 3-year testing period. **(b)** (1) In the case of an employer that has withdrawal liabi

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1386

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29 U.S.C. § 1397 — Application of part in case of certain pre-1980 withdrawals; adjustment of covered plan

**(a)** For the purpose of determining the amount of unfunded vested benefits allocable to an employer for a partial or complete withdrawal from a plan which occurs after September 25, 1980, and for the purpose of determining whether there has been a partial withdrawal after such date, the amount of contributions, and the number of contribution base units, of such employer properly allocable— (1) to work performed under a collective bargaining agreement for which there was a permanent cessation of the obligation to contribute before September 26, 1980, or (2) to work performed at a facility at which all covered operations permanently ceased before September 26, 1980, or for which there was a permanent cessation of the obligation to contribute before that date, shall not be taken into account. **(b)** A plan may, in a manner not inconsistent with regulations, which shall be prescribed by the corporation, adjust the amount of unfunded vested benefits allocable to other employers under a plan maintained by an employer described in subsection (a).

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1397

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26 U.S.C. § 4975 — Tax on prohibited transactions

**(a) Initial taxes on disqualified person** There is hereby imposed a tax on each prohibited transaction. The rate of tax shall be equal to 15 percent of the amount involved with respect to the prohibited transaction for each year (or part thereof) in the taxable period. The tax imposed by this subsection shall be paid by any disqualified person who participates in the prohibited transaction (other than a fiduciary acting only as such). **(b) Additional taxes on disqualified person** In any case in which an initial tax is imposed by subsection (a) on a prohibited transaction and the transaction is not corrected within the taxable period, there is hereby imposed a tax equal to 100 percent of the amount involved. The tax imposed by this subsection shall be paid by any disqualified person who participated in the prohibited transaction (other than a fiduciary acting only as such). **(c) Prohibited transaction** (1) **General rule** — For purposes of this section, the term “prohibited transaction” means any direct or indirect— (A) sale or exchange, or leasing, of any property between a plan and a disqualified person; (B) lending of money or other extension of credit between a plan and a disqualified person; (C) furnishing of goods, services, or facilities between a plan and a disqualified person; (D) transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan; (E) act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interest or for his own account; or (F) receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or asse

Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4975

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29 U.S.C. § 1085 — Additional funding rules for multiemployer plans in endangered status or critical status

**(a) General rule** For purposes of this part, in the case of a multiemployer plan in effect on July 16, 2006— (1) if the plan is in endangered status— (A) the plan sponsor shall adopt and implement a funding improvement plan in accordance with the requirements of subsection (c), and (B) the requirements of subsection (d) shall apply during the funding plan adoption period and the funding improvement period, (2) if the plan is in critical status— (A) the plan sponsor shall adopt and implement a rehabilitation plan in accordance with the requirements of subsection (e), and (B) the requirements of subsection (f) shall apply during the rehabilitation plan adoption period and the rehabilitation period, and (3) if the plan is in critical and declining status— (A) the requirements of paragraph (2) shall apply to the plan; and (B) the plan sponsor may, by plan amendment, suspend benefits in accordance with the requirements of subsection (e)(9). **(b) Determination of endangered and critical status** For purposes of this section— (1) **Endangered status** — A multiemployer plan is in endangered status for a plan year if, as determined by the plan actuary under paragraph (3), the plan is not in critical status for the plan year and is not described in paragraph (5), and, as of the beginning of the plan year, either— (A) the plan’s funded percentage for such plan year is less than 80 percent, or (B) the plan has an accumulated funding deficiency for such plan year, or is projected to have such an accumulated funding deficiency for any of the 6 succeeding plan years, taking into account any extension of amortization periods under [section 1084(d) of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section1084/d&num=0&ed

Source: Supplied U.S. Code snapshot — release unconfirmed · 29 U.S.C. § 1085

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